More and more people are seeing property as a long-term investment.
With rising rental demand, now is an excellent time to become a landlord or add to your existing portfolio.
That’s the message from letting agents in Plymouth, who are reporting an increase in the number of first-time landlords looking for at least one property.
Richard Rabin, Director at Lang Town & Country, says: “Only 18 months ago we saw very little investor activity.
“In the last 12 months, we’ve seen an increase of over 22% in new landlords wanting to get on the ladder.”
Huge tenant demand outstripping supply across the UK
According to the RICS residential survey, tenant demand rose for a fifth straight quarter. A current net balance of +52% of respondents reported an increase in demand.
The imbalance between supply and demand has put upward pressure on prices.
Rental forecasts look strong. The RICS residential survey forecasts rents to rise by three per cent over the next 12 months.
South West sees largest increase as UK rental prices rise
The average monthly rent in the UK is now at a record high of £1,029.
In the 12 months to July 2021, UK monthly rent increased by 6.6%, rising from £965 to £1,029.
During July, all regions in the UK experienced an annual increase in monthly rent. The South West experienced one of the biggest increases at 12.9%.
Over one in five of all new rental tenancies are agreed in August and September. So, the next two months are set to be busy.
Plymouth house prices are at at all-time high
A boom in demand for properties in Plymouth has led to record numbers of homes selling for above their asking price.
According to Dataloft, the average sales price of a property in Plymouth over the last 12 months is £218,000. This represents a 10 per cent increase over the previous year.
Richard Rabin says: “Some landlords worry about the increase in house prices.
“However, we reassure them that the rental prices are now at a level never before seen in Plymouth.”
The average rent achieved for properties let in Plymouth over the last year was £714 pcm.
This reflects a five per cent rise on the previous 12-month period.
Richard explains: “Whereas we were achieving £575 pcm for a typical one-bedroom apartment. We are now looking at rents up to £650 pcm for the same property.
“The same applies when we look at the larger high-end properties. Only 18 months ago a typical four-bedroom detached was £1,250 pcm. We are now achieving rents around £1,500 to 1,600 pcm.”
Tenants desperate for quality Plymouth properties
The demand from tenants in Plymouth since the initial lockdown in March 2020 has been staggering.
However, the Covid-19 pandemic has changed the things people look for in a property.
Though the nationwide lockdown has come to an end, more and more people continue to work from home.
Richard Rabin says: “We’re seeing that those who are working from home want a different working environment.
“The lack of need to commute means many now don’t need to live close to their place of work.”
“Another highly sought-after feature is outdoor space, if people’s price range can accommodate it.
“Landlords are seeing plenty of opportunities to expand their portfolios to meet excellent levels of tenant demand and changes in the type of property people now want to rent.
“There has certainly been a growth in tenant demand for family homes, for example, and landlords are reacting accordingly.”
Why now is a GREAT time to become a landlord in Plymouth
New research shows that more than half (53%) of mortgage brokers expect buy-to-let business to go from strength-to-strength in the next 12 months.
The study from Paragon Bank shows that only 10% of intermediaries expect buy-to-let business to fall, indicating that there’s strong confidence in the sector.
During the second quarter of this year, 42% of brokers reported that demand for buy-to-let was ‘strong’, while 8% labelled it as ‘very strong’.
This is despite the tapering of the stamp duty holiday, which is due to expire completely at the end of September.
Richard Rabin says: “Although the second phase of the stamp duty relief is coming to an end in September, we do not see this affecting the demand from investors now coming back to the market.”
“The main problem we have at the moment is that we don’t have enough stock for the tenants we want to try and help.
“We think it’s going to continue to be really busy and now is a really good time to become a landlord.
“If you are interested in becoming a landlord, or you would like any help or guidance with renting a property, just give us a call on 01752 201010.”
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